VN's insurance industry grows despite economic crisis

Business Desk
Viet Nam News
Publication Date: 14-07-2009

The insurance industry continues to maintain a high growth rate despite the adverse impact of the global economic crisis, industry insiders say.

The nation’s insurance companies collected a combined VND11.92 trillion (US$681 million) in premiums during the first half of 2009, up 11 per cent against the same period last year, according to the Ministry of Finance.

Of the total, VND6.29 trillion ($359.4 million) came from non-life premiums, a year-on-year increase of 13.5 per cent, and VND5.36 trillion ($306.2 million) came from life insurance, an increase of 8 per cent.

Insurance companies have introduced a series of new products, with higher levels of coverage and more reasonable premiums in a bid to lure new policy holders, along with encouraging current customers to keep their policies active.

Korea Life Viet Nam general director Jung Seop Hyun said that, although Viet Nam’s life insurance industry was no longer enjoying the boom it once did, it had considerable potential for further development, with just 10 per cent of the country’s population now holding life insurance.

In its recent report on Viet Nam’s insurance outlook through 2013, the global group Business Wire said Viet Nam was one of the few markets with prospects in this area, citing the country’s population of more than 85 million and its strong foreign investment inflow.

Business Wire has forecast that Viet Nam’s life insurance industry would grow at an annual rate of 11 per cent, with the non-life sector pegged to surge by 24.5 per cent per year during 2009-13.

Insurance experts also predict that bancassurance – insurance products and services sold by a banking institution – would also develop strongly in Viet Nam over the next few years.

Since 2006, a number of banks and insurance companies have co-operated to offer insurance services through the banking system. French-invested Prevoir Viet Nam Life Insurance Co has co-operation with 12 banks in Viet Nam to provide insurance products for the domestic market, while BNP Paribas Assurance Group has joined Vietcombank and SeABank to set up a life insurance joint venture to distribute its products via the two banks.

Sacombank, Bao Viet Bank and Eastern Bank were also reportedly exploring this market.

Meanwhile, the head of the Ministry of Finance’s insurance department, Trinh Thanh Hoan, revealed that his division was planning to issue a number of new directives in order to improve insurance companies’ capacity and operational effectiveness.

Hoan recommended that insurers diversify their products and focus on those with strong growth prospects, such as health, education, retirement, credit and agricultural insurance.